Introduction of the term Debenture Redemption Reserve

Question

Give a brief introduction of the term Debenture Redemption Reserve (or DRR)?

Answer 1

Debenture Redemption Reserve is non-convertible debentures that have to be created through seeing the profits and the shares as more it grows extra the amount will be collected. For this up to date commercial project finance has to be generated and given so that creation of the DRR can be completed. If there is a profit and the employment of the profit has to be completed then the DRR can be created either in higher amounts or in equivalent installments for a long period of time. If remaining profits after transfer to DRR are not sufficient to distribute the dividend then companies are permitted to allocate the dividend from general reserves for convinced years. DRR takes only fifty percent of the amount of debenture issue that has been created through the procedure.